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News of the Day ... in Perspective

2/26/2004

Greenspan says that entitlements must be cut.

At some point, the U.S. needs to face the fact that the government has promised more in entitlement benefits than it can pay, warned Federal Reserve chief Alan Greenspan. The dramatic demographic change due in just four years, as baby boomers start to retire, will place enormous demands on the working generation.

Greenspan recommended changes in the way the cost-of-living increases are calculated and tying the eligibility age to the increases in longevity. He said that tax cuts needed to be made permanent to bolster economic growth.

Democrats running for President declared Greenspan’s message to be an “outrage” or a “disgrace,” and said that tax cuts for the rich should be rolled back. President Bush said that Social Security benefits “should not be changed for people at or near retirement.” Rep. Clay Shaw (R-FL), Chairman of the Ways and Means subcommittee on Social Security promised seniors and those nearing retirement: “You will receive nothing less than 100% of what you have been promised.”

The AP story was apparently silent on what would happen to persons who are not yet “near retirement.”